Suspended NDIS firm’s boss reacts to ban as ATO debt of nearly $10m revealed

The boss of an NDIS company slapped with a temporary ban on caring for severely disabled people has defended it in his pyjamas, after only narrowly avoiding bankruptcy with the ATO. Listen to the audio.

A national NDIS company slapped with a temporary ban on caring for severely disabled people due to “safeguarding” concerns only narrowly avoided bankruptcy late last year after striking a deal with the ATO to repay a tax debt of nearly $10 million.

Horizon SolSolutions — which trades under the name of its subsidiary, Cocoon SDA Care — has also been under siege from its auditor, whose allegations include that “expenses were recorded as revenue.”

The emergence of these claims will heap further pressure on Cocoon’s parent company, after the NDIS Quality and Safeguards Commission on Wednesday said it was suspending its registration for 30 days over concerns about the wellbeing of clients.

Cocoon’s sole director Muhammad Latif emerged from his Sydney home in his pyjamas. Picture: Julian Andrews

Horizon is now temporarily prohibited from providing NDIS services such as disability accommodation, meaning 438 vulnerable people across the country will have to find new providers. Some will have to move to other homes.

Meanwhile staff have alleged they haven’t been paid wages or superannuation. Investors claim they haven’t been receiving returns that were promised.

On Thursday Horizon and Cocoon’s sole director Muhammad Latif emerged from his Sydney home in his pyjamas and a beanie to respond to the temporary deregistration decision by the commission — and to refute all accusations of wrongdoing.

“We have sent them a letter saying … that’s the wrong decision. We don’t agree with that,” said Mr Latif, who is also Horizon and Cocoon’s sole shareholder.

Cocoon SDA Care's executive director operations Pranay Kumar, left, and co-founder Muhammad Latif at an Australian Financial Review event in 2024 where the company was named one of the fastest growing in Australia. Picture: Facebook

Cocoon’s corporate strategist and co-founder Zaffar Khan — a former taxi driver and ex bankrupt who spruiks himself as a financial whiz on TikTok — told his 43,000 followers this week that there was no way he would “do anything unethical, anything illegal, anything wrongdoing at all here in my life”.

Horizon’s 2024 financial statement says it received $53.7m of revenue from the taxpayer for NDIS support services. It had another $11m of revenue.

The statement, obtained by this masthead, says “the entity’s ability to continue as a going concern is dependent on meeting monthly staggered financial obligation (sic) until 01/07/2027 as set out in … deed of arrangement entered between the company and the commissioner of taxation of the common wealth (sic) of Australia dated 20/11/2024.”

Asked about this, Mr Latif described it as the “normal course of business.”

Zaffar Khan, corporate Strategist at Cocoon SDA Care, gives tips on how to become a successful businessman on his popular TikTok account @zaffar.i.khan

According to the independent auditor’s report attached to the statement, “the company owed $9,546,902 to the Australian Taxation Office and was issued with a bankruptcy notice. However, management successfully negotiated a payment plan approved by the ATO in November 2024, and the default judgment was set aside in October 2024.”

The statement says the company turned a profit of $790,000, but still had negative equity of $14.2m due to accumulated losses in previous years.

The auditor expressed doubt about the accuracy of the bottom line in a scathing assessment of the way the company was being run.

Muhammad Latif is the sole director of NDIS provider Horizon Solutions. Picture: Julian Andrews

For example, multiple people had unauthorised access to its accounting software, “heightening the risk that errors or inappropriate changes could be made.”

“Certain expenses were recorded as revenue, potentially overstating reported financial performance,” the auditor said.

When this was put to Mr Latif by this masthead, he said he was not making any comment on legal advice.

Cocoon SDA Care’s website says it made it onto the Australian Financial Review’s list of best places to work.

The ATO is currently withholding some payments to Horizon while it performs a manual review. Horizon has commenced action in the Federal Court seeking to speed up an outcome of the review.

Mr Latif said the court had found that there is “no fraudulent (activity), no dishonesty, there is no noncompliance (by) Horizon.

“There is nothing in the manual review,” he said.

This masthead is not aware of the court making those findings.

The company’s 2024 financial statement says it employs 1116 people, up from 185 the year before and two in 2022.

Last month Cocoon said it had made it onto the Australian Financial Review’s list of best places to work.

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Originally published as Suspended NDIS firm’s boss reacts to ban as ATO debt of nearly $10m revealed